MBS Price Volatility Picks Up as Fed Funding Runs Dry. Reprices Possible

The Fannie 4.5 MBS coupon has lost all positive progress that was picked up following a much weaker than forecast ADP print at 815am.

The FN 4.5 is currently -0-01 at 100-08 yielding 4.477%...well off its intraday high of 100-16.

The 3.625% coupon bearing 10 year TSY note is testing the strength of the morning rally. We need 3.85% to hold!!!!

CHANCES FOR REPRICES FOR THE WORSE ARE ON THE RISE

DONT PANIC THOUGH....Get used to this price volatility, it's something we'll have to deal with when the Fed finishes up the MBS Purchase program today --- at least until non-"official" buyers (Fed) settle on a yield spread level that  justifies added extension risk.